Producing a new line of dripless candles in the coming years

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Reference no: EM13917364

Dandle’s Candles will be producing a new line of dripless candles in the coming years and has the choice of producing the candles in a large factory with a small number of workers or a small factory with a large number of workers. Each candle will be sold for $10. If the large factory is chosen, the cost per unit to produce each candle will be $2.40. The cost per unit will be $6.60 in the small factory. The large factory would have fixed cash costs of $1.8 million and a depreciation expense of $300,000 per year, while those expenses would be $570,000 and $100,000, respectively in the small factory. Calculate the accounting operating profit breakeven point for both factory choices for Dandle’s Candles.

Reference no: EM13917364

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